Buying a Franchise
REDUCING the RISKS of SELF-EMPLOYMENT Estelle Logan outlines some of the ways that buying a franchise can make going into business for yourself an attractive option
orking for somebody else isn’t exactly secure these days, especially in some of the industries hard-hit by Covid. When you buy your own business, though, as long as you choose wisely you can overcome that and be more in control of what you do and when you work. It also means you can react quickly to meet your customers’ needs and secure your livelihood. But working for yourself does mean taking some risks. The trick in business is to reduce that risk as far as possible. That’s where buying a franchise can pay off. If you do your pre-purchase research (otherwise called ‘due diligence’) carefully, then choosing the right franchise business can reduce your risk considerably.
reduce THE RISKS You see, while you might know a lot about yourself – your willingness to work hard, your ability to overcome problems, your determination to succeed, your pleasure in doing a good job – you don’t necessarily understand everything you need to know about running a business. As national franchisor for V.I.P. Home Services in New Zealand for over 26 years, I’ve often heard people say, ‘Why would you buy a franchise to mow lawns or clean houses? It’s so easy!’ Well, the answer is that there’s an art to mowing lawns and cleaning houses professionally and knowing how to make money and build a business while doing it. Think about your own property. How long does it take you to do your housework or mow the lawns? Most people we talk to will say, ‘It usually takes me all Saturday morning.’ If you were doing it as a business and it took half a day per time, could you really make money only doing 10 properties a week? But a franchise will not only help you find customers – it will teach you how to clean 5-6 houses per day or mow 10-15 lawns or more per day to a professional standard. That’s the difference between doing a job and running a business. Here are some examples to show how franchising can help you reduce the risks involved in going into business. These are mostly drawn from the home services sector, but the same applies to franchises in all sorts of industries. Remember, franchising is not just about branding and marketing – it’s about training and systems that allow you to make the most of the time you put in and help you achieve a profitable return on your investment.
reduce TRIAL & ERROR What equipment do you need to start your new business? Where can you get the best deal? How will it be supported? What products should you use to get the best results in an efficient way? What are industry standards? These are all important questions when you first start, but they’re questions to which your franchisor will know the answers. They will have researched the best possible methods, and researched new products and equipment as they come on the market. With the strength of the franchise, they’ll also have negotiated good deals. As a franchisee, you have immediate access to all these advantages from the very start of your business.
reduce MISTAKES Mistakes are costly – both in time and in the growth of your business. In our business, if you use the wrong sprays or damage trees because you don’t know any better, the cost of remediation can be huge. Scratching tinted windows when you clean them can be very expensive, while using the wrong products on showers or bench tops can void manufacturers’ warranties. This sort of knowledge is included in your training and regularly updated. It keeps your risks down and your reputation high.
reduce TIME When you first start in business, you’ll spend a lot of time learning how to do things, when to do things, how to get customers, etc. If you’re doing it alone, you’ll only learn from your mistakes. If you’re trying to build a mobile business, you’ll probably find you spend more time travelling to jobs than actually doing the work that brings in the money. It could take a long time to start turning a profit. Also, how do you quote each job to ensure that you can make a fair profit while being competitive? As a franchisee, you will be taught this and more by experienced professionals. This minimises the time from training to profitability as you apply the knowledge of a proven system. One of my favourite sayings is, ‘The only bad job is an under-priced one!’ No matter how difficult or time-consuming a job may be, if it has been priced correctly it will be a good job. Under-pricing will lose you money or cause you to cut corners and make customers unhappy.
reduce STRESS A lot of people get into business for themselves to get away from working for others, to be rewarded for the efforts they put in, and to make their own decisions. But being a business owner is stressful – it requires discipline, knowledge, training, assistance and advice. That stress doesn’t just fall on you – it can also affect your partner, children, family and home life. As a franchisee, you are not alone. You have a support team available at the touch of a phone, other franchisees to share experiences with, and someone to turn to for advice when things get tough – like they did last year. When Covid hit, all kinds of businesses had to adapt fast. From online ordering to in-store or in-home practices, specialist products and procedures had to be introduced – along with manuals and training in how to deliver them. Franchisees were saved a lot of time and stress because the franchise team did all that for them, as well as helping them understand and access the various subsidies available.
reduce GUESSING Guessing what products to buy, what to charge, where to advertise, when to replace equipment or expand your offer is no way to run a business. With a franchise, you’ll have access to manuals, advice, formulas and recommendations from people with real experience. They’ll have seen and helped other people who have faced exactly the same questions as you, and will have data and information to help you make the right decisions as you grow. That means you can focus instead upon serving your customers and growing your business.
reduce RESEARCH If you’re running an independent business, where do you go for information and how do you know how good it is? What are the best Franchise New Zealand
Year 30 Issue 01